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FAQs: GuideStar Charity Check

  1. What is IRS Publication 78, and why is it important?
  2. What is the Internal Revenue Bulletin, and why is it important?
  3. Can grantmakers rely on information from IRS Publication 78 and the Internal Revenue Bulletin?
  4. Why is it important for private foundations to verify a potential grant recipient's status in Publication 78?
  5. What is the IRS Business Master File, and why is it important?
  6. What does the Pension Protection Act of 2006 require grantmakers to do?
  7. Where can I find more information on supporting organizations?
  8. What are the IRS criteria for using a third-party source of BMF data to comply with the Pension Protection Act of 2006?
  9. Does GuideStar Charity Check meet all of the criteria of IRS Revenue Procedure 2009-32?
  10. Does GuideStar Charity Check help grantmakers identify supporting organizations?
  11. I’m already registered with GuideStar (or subscribe to GuideStar Premium) and have been using charities’ GuideStar Reports to verify their 501(c)(3) status. Why do I need GuideStar Charity Check?
  12. Why does the Charity Check report contain two unique sections…one for IRS Publication 78 details and another for IRS Business Master File details?
  13. Does GuideStar modify any of the data contained in Publication 78 or the IRS Business Master File?
  14. I am a potential grantee and my organization is not appearing in the IRS BMF section of Charity Check. What can I do to correct this?

  1. What is IRS Publication 78, and why is it important?

    IRS Publication 78, also known as Cumulative List of Organizations, is a quarterly publication that lists all organizations to which charitable contributions are tax deductible. Inclusion of an organization in Publication 78 signifies that it has received a ruling or determination letter from the IRS. To remain listed in Publication 78, an organization's status must not be suspended or revoked. For more information, view the IRS Publication 78 help file.

  2. What is the Internal Revenue Bulletin, and why is it important?

    Updates to Publication 78 are issued regularly in the Internal Revenue Bulletin. The Internal Revenue Bulletin lists any status changes since the last Publication 78 release. The date of the most recent Internal Revenue Bulletin is listed in the Charity Check report, along with the date of the most recent quarterly IRS Publication 78.

  3. Can grantmakers rely on information from IRS Publication 78 and the Internal Revenue Bulletin?

    Yes. IRS Revenue Procedure 82-39, 1982-1 C.B. 759 Sec.3.01 and Sec.3.02 states that grantors "may rely on the classification of an organization listed in or covered by Publication No. 78."

  4. Why is it important for private foundations to verify a potential grant recipient's status in Publication 78?

    There are several reasons why it is best practice for private foundations to verify a potential grant recipient's status in Publication 78:

    1. Internal foundation documents may limit grants to public charities.
    2. To document qualified expenditures for meeting payout requirements and for reporting on Form 990-PF.
    3. To avoid expenditure responsibility for the grant.


  5. What is the IRS Business Master File, and why is it important?

    The IRS Business Master File (BMF) lists all tax-exempt organizations registered with the IRS. The IRS has specified in Revenue Procedure 2009-32 that grantmakers can use BMF data to verify a grantee's public charity classification under section 509(a)(1), (2), or (3). The IRS BMF is updated monthly, and the most recent IRS BMF date is incorporated into the body of the Charity Check report.

  6. What does the Pension Protection Act of 2006 require grantmakers to do?

    The Pension Protection Act (PPA) created a new nomenclature to clarify the types of supporting organizations, including: Type I, Type II, Type III, and Functionally integrated Type III organizations.

    The PPA added three provisions to the tax code that impose excise taxes on sponsors of donor-advised funds and on private foundations for distributions to supporting organizations under certain circumstances.

    To avoid the excise tax, private foundations and sponsors of donor-advised funds must determine whether potential recipients of grants and contributions are supporting organizations under section 509(a)(3). If the potential recipient is a supporting organization, then the grantor must determine what "type" the grantee is.

    IRS Revenue Procedure 2009-32 provides that a grantor "may rely on either (1) information from the IRS Business Master File ('BMF'), or (2) the grantee’s current IRS letter recognizing the grantee as exempt from federal income tax and indicating the grantee’s public charity classification."

  7. Where can I find more information on supporting organizations?

    See "A Brief Overview of Supporting Organizations."

  8. What are the IRS criteria for using a third-party source of BMF data to comply with the Pension Protection Act of 2006?

    The third-party source must present BMF information in a report that shows:

    1. "the grantee’s name, Employer Identification Number, and public charity classification under § 509(a)(1), (2), or (3)";
    2. "a statement that the information is from the most current update of the BMF and the BMF revision date"; and
    3. "the date and time the information was provided to the grantor."

    Additionally, the IRS requires the third-party BMF data source to be "in a form that the grantor can store in hard copy or electronically."

  9. Does GuideStar Charity Check meet all of the criteria of IRS Revenue Procedure 2009-32?

    Yes. GuideStar Charity Check is 100% compliant with the requirements of IRS Revenue Procedure 2009-32 concerning reliance on third-party sources of IRS Business Master File data, such as GuideStar, for identification of supporting organization status.

  10. Does GuideStar Charity Check help grantmakers identify supporting organizations?

    Yes. GuideStar Charity Check includes a "reason for non-private foundation status" for every 501(c)(3) public charity in the GuideStar database.

    If the reason for non-private foundation status reads, "Section 509(a)(1) organization as referred to in Section 170(b)(1)(A)(vi)" or "Section 509(a)(2) organization," the nonprofit is not a supporting organization and is automatically eligible to receive charitable distributions.

    If the reason for non-private foundation status says, "Section 509(a)(3) organization," the organization is a supporting organization, and further research is necessary to ensure that a contribution to the organization would be a qualifying distribution, and if so, under what circumstances.

  11. I’m already registered with GuideStar (or subscribe to GuideStar Premium) and have been using charities’ GuideStar Reports to verify their 501(c)(3) status. Why do I need GuideStar Charity Check?

    Although every organization in the GuideStar database is recognized as an exempt organization by the IRS, merely finding a nonprofit on GuideStar does not fulfill a grantmaker's pre-grant due-diligence responsibilities. At a minimum, grantmakers need to verify a potential grantee's eligibility to receive tax-deductible contributions and to confirm the reason for non-private foundation status to avoid tax penalties and burdensome paperwork requirements.

  12. Why does the Charity Check report contain two unique sections…one for IRS Publication 78 details and another for IRS Business Master File details?

    Publication 78 and the IRS Business Master File each contain unique pieces of information that are critical to performing two different types of due diligence. Although Publication 78 may be consulted to verify an organization's charitable status, the IRS Business Master File must be tapped in order to confirm an organization's reason for non-private foundation status.

    These two data sources are discreet and independently maintained by the IRS. GuideStar Charity Check displays relevant information from both sources to ensure that grantmakers can perform comprehensive due diligence for (1) verification of charitable status (via Publication 78) and (2) determination if an organization is a supporting organization based on its reason for non-private foundation status (via the IRS Business Master File).

  13. Does GuideStar modify any of the data contained in Publication 78 or the IRS Business Master File?

    No. GuideStar Charity Check marries these data sources to provide one comprehensive report but never modifies the IRS data, ensuring compliance with IRS Revenue Procedure 2009-32.

  14. I am a potential grantee and my organization is not appearing in the IRS BMF section of Charity Check. What can I do to correct this?

    Because GuideStar Charity Check presents the exact data that appear in the IRS BMF, organizations should work directly with the IRS to ensure that their information is updated and accurately reflected in the IRS database.

    GuideStar cannot and will not modify the IRS BMF database in any way. Contact the IRS customer service directly at 1-877-829-5500.